LG Chem Q1 2026: Consolidated Operating Loss of KRW 50bn, Net Loss of KRW 782bn; Petrochem Improves, Battery Weakness Remains; Shareholder Return Policy Maintained
Consolidated Q1 2026: Sales KRW 12.25tn, Operating loss KRW 49.7bn, Net loss KRW 781.9bn (attributable to parent -KRW 348.2bn), EPS -KRW 4,449
Separate: Operating profit KRW 142.9bn, Net profit KRW 211.7bn
Segments: Petrochem op. profit KRW 164.8bn (improved), Advanced materials op. loss KRW 43.3bn (narrowed), Life sciences op. profit KRW 33.7bn, LG Energy Solution op. loss KRW 207.8bn (battery weakness), Common & others op. profit KRW 2.9bn
Shareholder return: Paid FY2025 dividend (common KRW 2,000, preferred KRW 2,050) despite net loss using LG Energy Solution stake sale proceeds. Plan to gradually reduce LGES stake to ~70% over 5 years, allocate 10% of after-tax proceeds to share buybacks/cancellation and dividends. Target consolidated payout ratio 30%.
Shareholder proposals rejected: Advisory shareholder proposal, independent director proposal voted down. Related proposals on NAV discount KPI and additional buybacks automatically lapsed.
Major contracts: Long-term cathode material supply contracts with Toyota, GM, etc. GM contract to start supply from H2 2026. Volumes subject to EV demand fluctuations.
Risks: Ongoing litigation (LG Polymers India gas leak, GM Bolt EV class actions). Debt guarantees for subsidiaries KRW 11.25tn. Significant capital expenditure commitments for battery plant construction.